Waltrip race team finds important asset in partner

CONCORD, N.C. -- The potential savior of Michael Waltrip Racing is a 44-year-old New York native who went to college in Boston, lives in London, and has a reported net worth of $1.8 billion. Robert Kauffman runs the European operations of a U.S.-based investment group, owns a muscle car sales and refurbishment shop not too far from Lowe's Motor Speedway, and is now an equal partner in the most enigmatic organization on NASCAR's premier circuit.

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Kauffman was introduced Friday as part of a sweeping restructuring of Michael Waltrip Racing, which is adding equipment and personnel in an attempt to snap out of the struggles that have plagued the team's debut season in Nextel Cup. He sat quietly and almost anonymously in a director's chair as Dale Jarrett announced his impending retirement, and David Reutimann accepted the mantle as the driver of the No. 44 car for the bulk of next year. But it soon became evident that this man with the brushy haircut, who watches races over the Internet and keeps an office on Savile Row, was the financial linchpin for all the hopes and dreams the Waltrip team harbors for the future.

"Having a little extra financial firepower allows them to invest," said Kauffman, a founder of Fortress Investment Group, an asset management firm that handles hedge funds, real estate, and other ventures. "This is a very competitive business. The folks you're teeing it up against, the Penskes and Hendricks and the like, are pretty serious folks. You can't be on a shoestring budget to be competitive."

That's been painfully evident this season with Michael Waltrip Racing, which has faced epic difficulties in just making races, and has all three of its drivers outside the top 35 in owner points. But the financial realities began to dawn on Waltrip before his cars ever took to the track. It was January when he realized that much-needed big-ticket items like a chassis dynamometer and a body shop had been pushed back again and again. Reports from general manager Ty Norris began to take on a dire tone. He took those concerns to his wife Buffy, who took them to Charlotte businessman and real estate magnate John Harris, who introduced the NASCAR team owner to Kauffman.

The two first met in May, on the eve of the sport's all-star race. Kauffman, a self-professed car guy, consulted advisors like former team owner Cal Wells and agent Alan Miller. When he agreed to come aboard, he didn't ask for the team to change its name or for Waltrip to give up managing control. But he did want more people, and the result was an influx of management that the organization had previously lacked. Wells was hired as the team's executive vice president. Eric Warren, formerly of Evernham Motorsports, was hired as technical director. A chief financial officer was added. Before he even signed the paperwork, Kauffman demanded changes that could have a lasting impact going forward.

"Rob came back and said, 'I want to do it, but I want to have a CFO in place, I want Cal to help run the day-to-day operations, I want to do this, this and that,'" Waltrip said. "I was like, 'Yeah, that's a lot better idea than I had!' So it's just a perfect fit for me, because of his knowledge of the business world. These are big businesses now, and he understands how to treat it the way it needs to be treated."

Added Norris: "One of the first things they recognized, in a corporation this size, they asked, 'Where's your depth?' We were like, 'We're right here.' That was one of the things they wanted to immediately address. They wanted a chief financial officer. They wanted someone with a lot of NASCAR savvy and experience in the things an owner has to deal with as a quasi-representative for him, because obviously Rob's going to be in Europe and he's got his own business. They identified Cal Wells."

Kauffman spent money out of his own pocket -- Fortress, his company, isn't part of the deal -- and made sure it went directly into the team. Although he wouldn't say how much his share of the team cost, it surely wasn't cheap, given that cars in Nextel Cup operate on a budget of roughly $10-$20 million apiece. He's buying into a team that's missed a combined 37 races, that was hammered with a severe NASCAR penalty for use of an illegal fuel additive prior to the Daytona 500 and has one top-10 finish between its three drivers despite opening the year as Toyota's flagship team.

But Kauffman, who made his fortune in the sometimes volatile world of hedge funds, is no stranger to risk. He wasn't deterred by the rather underwhelming results turned in this season by the Waltrip organization.

"Actually, it did the opposite," he said. "Somebody you can help out, I think, is probably a better partnership than somebody that you're useless to. Stripped away, the building blocks to me look tremendous. We'll see how it turns out. But the partnership with Toyota, that's a long-term agreement. I think that's going to be a fantastic agreement. We're already seeing the results now. The sponsorship, the partners they have, the drivers, it's a top-tier organization, and now was the right time to invest."

Kauffman joins a growing list of nontraditional investors entering NASCAR, from Montreal Canadiens owner George Gillett to the parent company of the Boston Red Sox to the investment group that helped restructure Richard Childress Racing after Dale Earnhardt's death. There's no guarantee of a return -- the way to make $1 million in NASCAR, or so the old saying goes, is to start with $2 million. But Kauffman, ranked No. 557 on the Forbes magazine list of the world's billionaires, can afford to be patient.

"This is a personal investment," he said. "As long as the business does well over a long period of time, that's really all I care about. It's like buying your own house. If you're happy to be in it, that's fine."

The opinions expressed are those solely of the writer